Tirana, September 22Tirana, September 22ndnd, , 20082008

NATIONAL AGENCY OF NATURAL RESOURCESNATIONAL AGENCY OF NATURAL RESOURCES

AKBN’S ACTIVITY AKBN’S ACTIVITY

• The National Agency of Natural Resources (AKBN), is a The National Agency of Natural Resources (AKBN), is a public institution, constituted by the Decision of the public institution, constituted by the Decision of the Albanian Council of Ministers No.547, date 09.08.2006.Albanian Council of Ministers No.547, date 09.08.2006.

• The National Agency of Natural Resources takes care of The National Agency of Natural Resources takes care of all petroleum, hydropower, mining activities and, since all petroleum, hydropower, mining activities and, since April 2007, takes also care of renewable sources of April 2007, takes also care of renewable sources of energy, energy efficiency and of the National Strategy of energy, energy efficiency and of the National Strategy of Energy (Decision of the Council of Ministers No.202, date Energy (Decision of the Council of Ministers No.202, date 11.04.2007).11.04.2007).

• The Agency relates directly to the Minister of Economy, The Agency relates directly to the Minister of Economy, Trade and Energy. Trade and Energy.

• The Agency is the main official and institutional adviser The Agency is the main official and institutional adviser to the Albanian Government on all mining, petroleum, to the Albanian Government on all mining, petroleum, hydropower and energy activities.hydropower and energy activities.

• The Agency is the Albanian institution that promotes all The Agency is the Albanian institution that promotes all natural resources, objects of its own activities. natural resources, objects of its own activities.

DEPARTMENTSDEPARTMENTS

• MINING DEPARTMENTMINING DEPARTMENT

• PETROLEUM DEPARTMENTPETROLEUM DEPARTMENT

• HYDRO POWER DEPARTMENTHYDRO POWER DEPARTMENT

• RENEWABLE ENERGY DEPARTMENTRENEWABLE ENERGY DEPARTMENT

• COORDINATION DEPARTMENTCOORDINATION DEPARTMENT

MINING DEPARTMENTMINING DEPARTMENT

• Consults and collaborates with relevant Albanian and Consults and collaborates with relevant Albanian and foreign institutions, in order to select targets, prepare foreign institutions, in order to select targets, prepare strategies and policies related to mining activities;strategies and policies related to mining activities;

• Follows and fulfills all obligations related to and derived Follows and fulfills all obligations related to and derived from strategies and policies in mining sector;from strategies and policies in mining sector;

• Provides technical expertise on engineering studies Provides technical expertise on engineering studies projects and programs, concerning mining and post projects and programs, concerning mining and post mining activities;mining activities;

• Promotes all kind of Albanian mining resources.Promotes all kind of Albanian mining resources.• Controls and supervises all given mining exploitation Controls and supervises all given mining exploitation

licenses and asks for the correct fulfillment of the licenses and asks for the correct fulfillment of the development programs’ implementation;development programs’ implementation;

• Supervises post mining activities.Supervises post mining activities.

The map of Albania with The map of Albania with mining permits according mining permits according

to the districtsto the districts

Exploration, exploitation and processing of Exploration, exploitation and processing of mineral ores represents a significant mineral ores represents a significant activity for the Albanian economy.activity for the Albanian economy.

The restructuring process on mining The restructuring process on mining sector, after the collapse of the regime, sector, after the collapse of the regime, passed through the following stages:passed through the following stages:

• Closure of all mines valuated non Closure of all mines valuated non effective and conservation of other ones effective and conservation of other ones (1993, still ongoing)),(1993, still ongoing)),• Privatization process (1994, still ongoing),Privatization process (1994, still ongoing),• Restructuring of chromium and copper Restructuring of chromium and copper state owned enterprises (1994 – 1998),state owned enterprises (1994 – 1998),• Constitution of all needed legal Constitution of all needed legal framework, based on the free market framework, based on the free market principles (1994, still ongoing),principles (1994, still ongoing),• Concessions on mining sector assets Concessions on mining sector assets (1995, still ongoing).(1995, still ongoing).

The legal framework related to mining exploration and The legal framework related to mining exploration and exploitation in Albania is governed by three principal exploitation in Albania is governed by three principal laws:laws:

• ““Mining Law of Albania“;Mining Law of Albania“;

• ““For civil use of explosives in the Republic of For civil use of explosives in the Republic of Albania”;Albania”;

• ““On national taxes”.On national taxes”.

Any kind of mining activity related to engineering, Any kind of mining activity related to engineering, assessment, consulting, monitoring, technical assessment, consulting, monitoring, technical supervision etc. is conducted through a Professional supervision etc. is conducted through a Professional License.License.

LEGAL FRAMEWORKLEGAL FRAMEWORK

Mining Permits according to the yearsMining Permits according to the years

715

612

57

44 41

24

5263

79

60

140

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07 Years

No

. Min

ing

Pe

rmit

s

PRODUCTIONPRODUCTION IN 2006 and 2007IN 2006 and 2007

No.No. MineralMineral ProductionProduction

20062006 20072007

1.1. ChromeChrome 189 531 tons189 531 tons 325 000 tons325 000 tons

2.2. Chromium ConcentrateChromium Concentrate 2800 tons2800 tons 2 800 tons2 800 tons

3.3. Copper Copper 00 100 000 tons100 000 tons

4.4. Copper ConcentrateCopper Concentrate 00 16 000 tons16 000 tons

5.5. Fe-Ni and Ni-SiFe-Ni and Ni-Si 74 000 tons74 000 tons 370 000 tons370 000 tons

6.6. CoalCoal 3 800 tons3 800 tons 4000 tons4000 tons

7.7. LimestonesLimestones 1 344 890 m1 344 890 m33 1 600 000 m1 600 000 m33

8.8. Marbled limestones blocksMarbled limestones blocks 11 420 m11 420 m33 20 000 m20 000 m33

9.9. Beded limestonesBeded limestones 22 793 m22 793 m33 30 000 m30 000 m33

10.10. Sandstone in blocks and bededSandstone in blocks and beded 3 200 m3 200 m33 10 000 m10 000 m33

11.11. ClaysClays 562 469 tons562 469 tons 800 000 tons800 000 tons

12.12. GypsumGypsum 20 378 tons20 378 tons 40 000 tons40 000 tons

CHROMECHROME

• Category B+CCategory B+C11 21.8 million tons21.8 million tons

• Category CCategory C22: : 15.1 million tons15.1 million tons

• Total: B+CTotal: B+C11+C+C22:: 36.9 million tons36.9 million tons

There are three main chrome regions in There are three main chrome regions in Albania:Albania:

Estimated geologic reserves of chrome in Estimated geologic reserves of chrome in these regions are:these regions are:

Chrome’s depositsChrome’s deposits

1.1. North-East Region (Ultrabasic Massif North-East Region (Ultrabasic Massif of Tropojaof Tropoja and Kukës)and Kukës)

2.2. Central Region (Ultrabasic Massif ofCentral Region (Ultrabasic Massif of Bulqiza).Bulqiza).

3.3. South-East Region (Ultrabasic Massif South-East Region (Ultrabasic Massif ofof Shebenik-Pogradecit)Shebenik-Pogradecit)

COPPERCOPPER

In Albania there are four main types of copper deposits::

• Hydrothermal-Methasomatic and Hydrothermal-Methasomatic and Volcanogenic-Sedimentary Deposits Volcanogenic-Sedimentary Deposits (Munella, Qaf-Bari, Gurthi, Rruga Rinise, (Munella, Qaf-Bari, Gurthi, Rruga Rinise, etc.);etc.);

• Main type Volcanogenic-Hydrothermal-Main type Volcanogenic-Hydrothermal-Methasomatic Deposits, as: Tuçi, Spaci, Methasomatic Deposits, as: Tuçi, Spaci, Derven, Paluca, etc.);Derven, Paluca, etc.);

• Volcanogenic - Sedimentary Deposits Volcanogenic - Sedimentary Deposits (Munella, Gjegjan, Palaj, Karma, Rubik);(Munella, Gjegjan, Palaj, Karma, Rubik);

• Metasomatic Sulphide Massif Deposits Metasomatic Sulphide Massif Deposits (Kurbneshi, Golaj, Thirra, Nikoliqi etc.)..(Kurbneshi, Golaj, Thirra, Nikoliqi etc.)..

Copper’s depositsCopper’s deposits

NickelNickel

Nickel deposits in Albania are located in:Nickel deposits in Albania are located in:

• Devoll (Bilishti, Bitincka);Devoll (Bilishti, Bitincka);

• Pogradec – Librazhd (Guri I Kuq, Cervenake, Pogradec – Librazhd (Guri I Kuq, Cervenake, Prrenjas, Skroske, Xixillas, Bushtrice);Prrenjas, Skroske, Xixillas, Bushtrice);

• Kukes (Mamez, Trull Surroj, Nome)Kukes (Mamez, Trull Surroj, Nome)

The nickel ore is under the composition form The nickel ore is under the composition form of iron-nickel (Pogradec, Librazhd - 0.8-1.1 % of iron-nickel (Pogradec, Librazhd - 0.8-1.1 % Ni),Ni),

or under the composition form of nickel-or under the composition form of nickel-silicate (Devoll, Kukes - 1.1–1.4 % Ni).silicate (Devoll, Kukes - 1.1–1.4 % Ni).

Deposits of Fe-Ni and Ni-SiDeposits of Fe-Ni and Ni-Si

• TiranaTirana: : 86% of reserves86% of reserves;;

• KorçKorça a -- PogradecPogradec: : 10% of reserves10% of reserves;;

• MemaliajMemaliaj: : 4% of reserves 4% of reserves..

CCoals are ligniteoals are lignites (s (generalgenerally)ly)

• AAnalyticalnalytical calorific valuecalorific value:: 2000 2000 – – 56005600 kcal/ kcal/ kcal/kg kcal/kg

• CCalorific value in concentratesalorific value in concentrates:: up to up to 45004500--5500 kcal/kg5500 kcal/kg..

COALCOAL

Coal reserves In AlbaniaCoal reserves In Albania are estimated are estimated to be approximately 794 million tons.to be approximately 794 million tons.

They are located in three main They are located in three main regions:regions:

Coal’sCoal’s depositsdeposits

NON-METALLIFEROUS MINERALSNON-METALLIFEROUS MINERALS

Albania is rich on the industrial Albania is rich on the industrial minerals (non-metalliferous).minerals (non-metalliferous).

The most important minerals are:The most important minerals are:

•Limestones,Limestones,•Dolomites,Dolomites,•Clays,Clays,•Decorative stones,Decorative stones,•Basalts,Basalts,•Gypsums and anhydrites etc..Gypsums and anhydrites etc..

Deposits of non-metalliferous Deposits of non-metalliferous mineralsminerals

PETROLEUM DEPARTMENT PETROLEUM DEPARTMENT

• Assists the Albanian government, in collaboration with Assists the Albanian government, in collaboration with other institutions, in drafting policies in petroleum other institutions, in drafting policies in petroleum sector;sector;

• Negotiates all Petroleum Agreements on behalf of the Negotiates all Petroleum Agreements on behalf of the Albanian Government;Albanian Government;

• Supervises the Petroleum Operations;Supervises the Petroleum Operations;

• Manages the Petroleum Data;Manages the Petroleum Data;

• Promotes free areas for exploration, development and Promotes free areas for exploration, development and production of petroleum.production of petroleum.

ATTRACTION OF FOREIGN INVESTMENTS IN ATTRACTION OF FOREIGN INVESTMENTS IN PETROLEUM ACTIVITIES THROUGH:PETROLEUM ACTIVITIES THROUGH:

• Opening policies on oil and gas industry, in order to Opening policies on oil and gas industry, in order to facilitate free competition and market liberalization;facilitate free competition and market liberalization;

• Flexible and fast licensing procedures.Flexible and fast licensing procedures.

LEGAL FRAMEWORKLEGAL FRAMEWORK

The legal framework for The legal framework for petroleumpetroleum exploration and exploration and production in Albania is governed by three principal laws:production in Albania is governed by three principal laws:

− The law “On petroleum (exploration and production)”The law “On petroleum (exploration and production)”;;− The law “On the fiscal system on petroleum sector”The law “On the fiscal system on petroleum sector”− The law “On national taxes”.The law “On national taxes”.

Specificities of Specificities of petroleumpetroleum legislation: legislation:− Deals with technical and general issues;Deals with technical and general issues;− Deals with fiscal issues;Deals with fiscal issues;− Is simple; Is simple; − Is clear;Is clear;− Offers flexibility.Offers flexibility.

LICENSING ROUNDS ORGANIZED AFTER 1990LICENSING ROUNDS ORGANIZED AFTER 1990

Offshore Licensing Offshore Licensing First Onshore Second Onshore First Onshore Second Onshore Round Round Licensing Round Licensing Round Licensing Round Licensing Round

CURRENT PETROLEUM LICENSING SITUATION CURRENT PETROLEUM LICENSING SITUATION IN ALBANIAIN ALBANIA

Block Durres (Offshore) awarded Block Durres (Offshore) awarded in 2004. in 2004. Contractor and operator Contractor and operator Island International Exploration Island International Exploration BVBV;;

Block Joni 5 (Offshore) awarded in Block Joni 5 (Offshore) awarded in 2007. 2007. Contractor and operator Contractor and operator Capricorn Albania LimitedCapricorn Albania Limited;;

Blocks A and B (Onshore) Blocks A and B (Onshore) awarded in 2007. awarded in 2007. Contractor and Contractor and operator DWM Petroleum AGoperator DWM Petroleum AG;;

Blocks D and E (Onshore) Blocks D and E (Onshore) awarded in 2007. awarded in 2007. Contractor and Contractor and operator DWM Petroleum AGoperator DWM Petroleum AG..

JONI 5

JONI 5

CAPRICORNALBANIALIMITED

ADRIATIKU

ADRIATIKU 3

ADRIATIKU 2

RODONI 1

1

2

3

45

6

7

8

F

E

D

C

B

A

AlbpetrolINA

P4

Velca

Dumre

Panaja

OFFSHORE LICENSED BLOCKS

ONSHORE LICENSED BLOCKS

ONSHORE FREE BLOCKS

OFFSHORE FREE BLOCKS

BLOCKS IN NEGOTIATION

DURRESI

ISLANDINTERNATIONALEXPLORATION &BEACHPETROLEUM

DWM

DWM

DWM

DWM

BLOCKS IN NEGOTIATION

The current licensing situation for The current licensing situation for petroleum exploration in Albania on petroleum exploration in Albania on February 1st, 2008:February 1st, 2008:

Existing Oil and Gas FieldsExisting Oil and Gas Fields

LICENCE-AGREEMENTS FOR DEVELOPMENT AND PRODUCTION, RELATED LICENCE-AGREEMENTS FOR DEVELOPMENT AND PRODUCTION, RELATED TO EXISTING OIL AND GAS FIELDS ISSUED TO ALBPETROL:TO EXISTING OIL AND GAS FIELDS ISSUED TO ALBPETROL:

Licence-AgreementLicence-Agreement for Patos- Marinza for Patos- Marinza oilfield issued in 2004. oilfield issued in 2004. Contractor Contractor Bankers PetroleumBankers Petroleum;;

Licence-AgreementLicence-Agreement for Ballsh-Hekal for Ballsh-Hekal oilfield issued in 2007. oilfield issued in 2007. Contractor Contractor Stream Oil & GasStream Oil & Gas;;

Licence-AgreementLicence-Agreement for Cakran-Mollaj for Cakran-Mollaj oilfield issued in 2007. oilfield issued in 2007. Contractor Contractor Stream Oil & GasStream Oil & Gas;;

Licence-AgreementLicence-Agreement for Gorisht-Kocul for Gorisht-Kocul oilfield issued in 2007. oilfield issued in 2007. Contractor Contractor Stream Oil & GasStream Oil & Gas;;

Licence-AgreementLicence-Agreement for Delvina oil& for Delvina oil& gas field and Delvina exploration gas field and Delvina exploration block issued in 2007. block issued in 2007. Contractor Contractor Stream Oil & GasStream Oil & Gas;;

Licence-AgreementLicence-Agreement for Kucova oilfield for Kucova oilfield issued in 2007. issued in 2007. Contractor Contractor Sherwood InternationalSherwood International..

SOME DATA ON OIL PRODUCTION IN ALBANIA IN 2002-2007SOME DATA ON OIL PRODUCTION IN ALBANIA IN 2002-2007

YearYearOil production in Albania (ton)Oil production in Albania (ton) Export sales Export sales

deliveries of deliveries of crude oil (ton)crude oil (ton)TotalTotal From From

limestone limestone depositsdeposits

From From sandstone sandstone depositsdeposits

From From foreign foreign

companiescompanies

20022002 369 000369 000 137 000137 000 232 000232 000 5 662.15 662.1 --

20032003 410 000410 000 136 300136 300 273 700273 700 44 618.144 618.1 --

20042004 444 000444 000 158 300158 300 285 700285 700 30 755.030 755.0 --

20052005 434 000434 000 127 000127 000 307 000307 000 97 882.197 882.1 3 451.33 451.3

20062006 474 000474 000 119 000119 000 355 000355 000 202 496.5202 496.5 67 099.167 099.1

20072007 562 000562 000 120 000120 000 442 000442 000 282 042.0282 042.0 153 264.9153 264.9

HYDRO POWER DEPARTMENT HYDRO POWER DEPARTMENT

• Consults and collaborates with relevant government Consults and collaborates with relevant government structures, on preparing policies related to hydro structures, on preparing policies related to hydro power sector; power sector;

• Applies the governmental policies in hydro power Applies the governmental policies in hydro power sector;sector;

• Provides the technical expertise, in respect with its Provides the technical expertise, in respect with its own institutional obligations, on studies and own institutional obligations, on studies and projects in hydro power sector;projects in hydro power sector;

• Supervises hydro power activity;Supervises hydro power activity;

• Monitors concessionary contracts on hydro power Monitors concessionary contracts on hydro power plants. plants.

RENEWABLE ENERGY DEPARTMENT RENEWABLE ENERGY DEPARTMENT

• Consults, advises and collaborates with all relevant Consults, advises and collaborates with all relevant governmental institutions, on policies related to governmental institutions, on policies related to renewable energy sources, energy efficiency, aiming renewable energy sources, energy efficiency, aiming the improvement of the Albanian National Strategy of the improvement of the Albanian National Strategy of Energy;Energy;

• Promotes the different initiatives and investments in Promotes the different initiatives and investments in renewable energy sources;renewable energy sources;

• Proposes different energy efficiency measures and Proposes different energy efficiency measures and implementation programmes in all the Albanian implementation programmes in all the Albanian economy sectors;economy sectors;

• Compiles and publishes the Annual Energy Balance at Compiles and publishes the Annual Energy Balance at national level, based on energy database and national level, based on energy database and statistics.statistics.

• Coordinates the administrative and economical problems Coordinates the administrative and economical problems between the Agency’s Departments, offering a specialized between the Agency’s Departments, offering a specialized support and aiming the harmonization of all structures of the support and aiming the harmonization of all structures of the Agency as a solid administrative body;Agency as a solid administrative body;

• Plans and controls the realization of the economical and Plans and controls the realization of the economical and financial requirements, aiming the effective use of financial financial requirements, aiming the effective use of financial sources and the good administration of the monetary values sources and the good administration of the monetary values and all assets of the Agency;and all assets of the Agency;

• Organizes and coordinates the work with other departments Organizes and coordinates the work with other departments of the Agency and thirds, in order to better promote all the of the Agency and thirds, in order to better promote all the Albanian natural resources;Albanian natural resources;

• Publishes and updates the Agency’s activities in its own Publishes and updates the Agency’s activities in its own website, enabling investments from domestic and foreign website, enabling investments from domestic and foreign companies;companies;

• Assists the Chairman of the Agency and its structures, in Assists the Chairman of the Agency and its structures, in making possible the fulfilment in time of all administrative making possible the fulfilment in time of all administrative obligations.obligations.

COORDINATIONCOORDINATION DEPARTMENT DEPARTMENT

THANK YOU FOR YOUR ATTENTION

http://www.akbn.gov.al

Tel: 00355 4 2246195

Fax: 00355 4 2257382